PW: Describe your packaging experience in Puerto Rico.
Henry: I was the engineering manager for Alcon Laboratories in Puerto Rico from 1976 to 1985. Since then I have owned a company that designs, sells, and services packaging machinery. For the past eight years I have also spent about half my time consulting on manufacturing effectiveness, particularly on changeover. I am a frequent speaker at Pack Expo, at other shows and conferences, and have published a couple dozen articles on packaging machinery, changeover, and related topics.
PW: How are drugs packaged and distributed in Puerto Rico compared to the process in the mainland U.S.?
Henry: In Puerto Rico, we do everything from compounding to final end-user packaging. Different companies distribute differently. Some companies send truckload [quantities] to distribution centers in the U.S. and elsewhere. Others, and this was the case when I worked for Alcon, send orders as small as mixed product cases to individual pharmacies.
PW: What are the advantages and disadvantages for drug or medical device companies in packaging their products in Puerto Rico?
Henry: Originally, it was a tax advantage. It used to be that under Section 936 of the Internal Revenue Code, companies with operations in Puerto Rico paid minimal or no federal taxes on Puerto Rico profits. That went away with a revision of the tax code in the 90’s. I believe that the last of these tax exemptions expires this year. Now the reason they stay is a very experienced and highly productive workforce, as well as an infrastructure of supporting companies. —Jim Butschli
